Cardiff School of Social Sciences

Capitalism and Social Progress: The Future of Society in a Global Economy

Phillip Brown, Hugh Lauder

Western nations are richer than they have ever been. Yet the social progress which was the dream of the great social thinkers of the late nineteenth and early twentieth century has eluded us. The social bargain by which workers and their families enjoyed greater prosperity through a national commitment to economic growth at mid-century has been destroyed. In America the top five per cent gain over 21 percent of all household income, while the bottom fifth receive less than four per cent between them. In Britain the gap between the rich and poor is greater than at any time since the late nineteenth century. For many middle class families the dream of stable career progression and of their children achieving the same middle class lifestyles, has been crossed by the shadow of job insecurity. At the same time, the price of failure has increased. Since the early 1970s, high-school-educated males in America are the first generation since World War II to experience a lower standard of living than their fathers and welfare provision for the working poor and unemployed has been stripped away.

If economic growth no longer holds out the prospect of prosperity to all, the material route to human happiness also rings hollow in the face of new uncertainties. There are no doubt a small proportion of wealthy Americans and Europeans who can insulate themselves from many of the risks confronting the rest of society. But this is clearly not the case for the vast majority of middle class wage earners. They are having to earn more to stand still as rising educational and health insurance costs are compounded by 'defensive' expenditure in the form of rising property insurance, burglar alarms, bars on windows, therapeutic services for stress, drug abuse and mental illness, along with all the other symptoms of ‘risk’ societies. One of the great paradoxes of the age is that at the very moment when choice and individual responsibility are the keynotes of nearly all political rhetoric individuals feel increasingly powerless to influence their lives. It is for these reasons that the question of how to reconcile the goals of economic competitiveness, social justice, human freedom and security in post-industrial societies defines the subject of this book.

Friedrich Hegel observed that the strengths that build great nations throughout history often become obsessions that undermine them. In the United States of America and Britain the transformation in personal, social and economic life has led to a return to the first principles of western capitalism based on market individualism. The excesses of the New Right have led to the search for a ‘third way’ between the command economy and the free market. But this book demonstrates that the ‘Left Modernizers’, in the form of the Clinton and Blair administrations, fundamentally failed to grasp the full implications of the global knowledge economy. Capitalism and Social Progress will argued that a viable ‘third way’ leading to a progressive social democratic future needs to be built by challenging both markets individualism and the dim view of intelligence that has characterized western societies throughout the twentieth century. The emphasis on intelligence is intended to highlight the fact that in a global knowledge economy our lives at work, home and school depend on the development of our multiple abilities including the emotions. Whereas the focus on the collective is intended to challenge our obsession with individual competition, it’s purpose is to endorse the spirit of cooperation as a condition of freedom, prosperity and social justice in the twenty-first century. Individual freedom depends on a new balance between competition and cooperation; the state and the market; rights and responsibilities. It is the collective intelligence of families, neighbours, business enterprise, and government that hold out the best chance of delivering economic prosperity and a decent quality of life for all, as we come to depend on empowerment through the pooling of intelligence to resolve common problems.

Accordingly, the distinction between paid work, that is assumed to be productive and unpaid work that is not, is an anachronism. In recent decades this distinction remained plausible so long as only a few needed to exercise 'intelligence' and that most formal learning could be completed at an early age. However, now that it is the intelligence of all that is required if people are to live fulfilling and productive lives, the creation of intelligence as well as its exploitation at work plays a major contribution in wealth creation. Under these changed circumstances the distinction between what is remunerated in the market and what is not is blurred because the more economic performance depends on the quality of human endeavour the more learning, in informal as well as formal settings, contributes to the bottom line. Collective intelligence will become the ultimate source of economic security in a global economy, but the pooling of intelligence is impossible to achieve in societies characterized by low-trust, economic insecurity and social polarization. These are not the conditions which foster learning. Unless people have a stake in society and feel economically secure and believe they have a future, the capacity for exercising collective intelligence is compromised.

We do not hide the fact that a society based on collective intelligence will have its costs. It is inevitable that wealth will have to be redistributed more fairly. We argue that the introduction of a carer’s wage and ultimately a citizen’s wage are essential to tackle poverty and to enhance the freedom of individuals to make meaningful choices about the lives they lead. Such arguments are, however, only compelling to those who are willing to acknowledge the social and economic debt that we have to society. If centre-left governments are to fulfil their aim of delivering freedom, justice and opportunity to all in a more cohesive society, they will have to exploit the potential for what we call ‘reflexive solidarity’. What makes the reflexivity of modern life a potential source of solidarity is that it disrupts, challenges, and forces us to reorder the routines of everyday life. In unintended but decisive ways, it is creating the opportunity for those on the centre-left to mount a challenge at the very heart of western capitalism - its internal guidance system based on competitive individualism and the industrialisation of intelligence.

The book is divided into three Parts. In Part One we examine the nature of society in mid-century America and Britain. It is argued that the post-war success of western nations rested on the development of the doctrine of economic nationalism in which social progress for workers and their families was advanced through the pursuit of economic growth. It combined, uniquely, three principles that would underwrite life in the third quarter of the twentieth century: prosperity,security, and opportunity. These principles were threaded through the fabric of everyday life in a tightly woven design which linked government policy, business organizations, families and education. Together, these three principles were applied to the resolution of the two fundamental tensions endemic to capitalism: its tendency to distribute rewards unfairly and its chronic instability, thereby delivering simultaneously social justice and economic efficiency, at least in the terms set by the doctrine of economic nationalism.

The Second Section examines how economic nationalism has been undermined by the new global economic competition and the return to primitive capitalism in the 1980s. It also examines the convergence of information technologies and their integration into the workplace, the need to free-up and speed-up the flow of information and decision-making, the increasing emphasis on team-work and project-work, and the need for flexible work practices; along with a new vocabulary of networks, empowerment, leadership, teamwork, downsizing, rightsizing, re-engineering, and contracting out, associated with a shift from the bureaucratic to flexible paradigm of organizational efficiency. These changes have led to the democratization of job insecurity and the imminent demise of industrial man. In the last chapter A False Start, we argue that the Left Modernizers focus on the development of educational opportunities as a way of responding to issues of social justice in a knowledge-driven global economy is fundamentally flawed. And in the final section of the book we re-assess the nature of the problems that need to be addressed. We then offer a definition of collective intelligence involving the development and pooling of intelligence to achieve common goals and resolve common problems. This leads into an analysis of the education, welfare and economic policies that would follow from organizing society according to these principles. It also argues that in a knowledge-driven economy, the role of the state should be defined in terms of the development of collective intelligence. Our conclusion is that the forces of knowledge-driven capitalism provides an unprecedented opportunity at the beginning of the twenty-first century to build societies based on the individual and collective intelligence of all.

Additional Information

Other related publications:

Brown, P. and Lauder, H. (2004) ‘Poverty, Learning Opportunities, and the Social Construction of Collective Intelligence’, in Olssen, M. (Ed.) Culture and Learning: Access and Opportunity in the Curriculum Greenwood Press.